DOJ Slams Energy Dept Contract to Law Firm

June 26, 2008 — -- The Justice Department is asking tough questions about a multi-million-dollar contract awarded by the Energy Department to a law firm, warning that conflicts of interest could delay the opening of the country's largest nuclear waste repository.

The firm of Morgan Lewis & Bockius LLP, which was awarded a four-year $47.7 million contract to shepherd the licensing for the Yucca Mountain nuclear waste repository, has acknowledged conflicts of interest on nuclear waste issues since it has represented more than a dozen utilities that have sued the agency.

The firm was granted a waiver from DOE rules on conflicts of interest and agreed to a plan "that would mitigate any conflict to the maximum extent practicable," according to an April report by the DOE's Inspector General.

But in a sharply-worded letter obtained by ABC News, a top Justice Department official criticized the Energy Department's failure to consult with DOJ and cautioned that the contract could jeopardize the opening of the long-delayed repository which would store the country's nuclear waste.

"Neither DOE nor Morgan Lewis consulted with or even notified the Department of Justice before entering into an agreement that involved significant conflicts of interest affecting the United States," wrote Jeanne E. Davidson, director of the Justice Department's commercial litigation branch in the letter sent to DOE Inspector General Gregory H. Friedman.

Davidson also notes that, "Under its new contract with DOE, Morgan Lewis' work may affect the date on which that repository may open in the future, if at all, potentially providing Morgan Lewis with the ability to affect the amount of damages that its clients in the SNF [spent nuclear fuel] cases will incur."

Morgan Lewis is currently seeking damage payments from the government for utility clients that store spent nuclear fuel on the site due to missed project deadlines.

In addition, the firm previously lobbied for the Nuclear Energy Institute, which supports the Yucca Mountain project.

With five one-year options, the contract could balloon to $109 million.

The state of Nevada, which has long opposed the repository, also objects to the contract and appealed to the Nuclear Regulatory Commission to have the firm disqualified, but the request was turned down.